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Impact of Trade Liberalization Asean-China Free Trade Area (ACFTA) on the Performance of Indonesia Maize Economy

Yudi Ferrianta1, Nuhfil Hanani, Budi Setiawan, and Wahib Muhaimin

ABSTRACT

This study aims to analyze the impact the ASEAN-China Free Trade Area (ACFTA) agreement on performance of Indonesia maize economy and to find out alternative policies within the maize self-sufficiency framework. This research uses an econometric model with a simultaneous equations system. Parameter estimation used is Two Stages Least Squares (2SLS). Forecasting the performance of Indonesia maize economy and the search for policy alternatives in 2010-2015 ACFTA eras is performed using ex ante simulation. The implementation trade liberalization agreements of ASEAN-China Free Trade Area (ACFTA) have negative impact on Indonesia maize economy. Indonesia does not have a policy package that can be used as a policy instrument for Indonesia maize self-sufficiency. Effective policy is to ban the import, but IT is difficult to do because contradict with ACFTA agreement. If Indonesia ‘should’ make maize self-sufficiency, then the policy that needs to be done is policies combination to increase acreage of 6.29% per year, to increase productivity 3.5%, and to increase raise maize prices by 4:47% through price subsides.
Keywords: ASEAN-China Free Trade Area (ACFTA), maize, simulation jurnal internaional yudi